Thursday, April 30, 2009

The Least Helpful Calls Today

The least helpful call you will get today—well, there are so many, and all of them in one stock, that we have a hard time winnowing it down to a single unhelpful call.

The stock, for the record, is Sequenom, a genetic testing company with a much-ballyhooed, non-invasive Down syndrome test that yielded what appeared to be highly accurate test results in recent months, and was expected to be launched this summer.The results looked so good the company was able to sell 5.5 million shares last summer, with barely a blip in a rising stock chart, to help fund the test.

Then last night the company announced a delay in the test launch, caused by “employee mishandling of R&D test data and results.”A stormy conference call a half hour after the press release did nothing to appease the barking seals that had been recommending the stock on dreams of billion-dollar type sales potential: “The clinical performance that was portrayed for these tests appears to be questionable,” is how the CEO put it, after much browbeating.

So, this morning, Leerink Swann, Rodman & Renshaw, JMP Securities and Oppenheimer, among others, have all removed various labels on the shares of Sequenom ranging from “Buy” to “Market Outperform” to “Perform” (yes, there are brokers who call stocks “Perform,” whatever that means) and replaced them with labels ranging from “Market Perform” to “Underperform,” with a couple of brave firms daring to use the less ambiguous “Sell.”Now, these moves don’t particularly help anyone looking to follow the advice of their brokers, which is why they are Least Helpful Calls.

After all, last night’s close in the shares of Sequenom was $14.91. This morning, pre-market, the price is somewhere in the $3 area.

Certainly the champ of today's Least Helpful Calls has to be a firm named Auriga U.S.A. which initiated the stock with a Buy and a target price of $20 a share just yesterday, and this morning is downgrading it to a Sell.New target price, $1.

Still, we nominate all the brokers who are downgrading Sequenom this morning for the Least Helpful Call You Will Get Today.

And now we head to Omaha, for a meeting that should be far more helpful than what we're hearing on Sequenom this morning.

The content contained in this blog represents the opinions of Mr. Matthews.Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews’ recommendations. This commentary in no way constitutes investment advice. It should never be relied on in making an investment decision, ever. Nor are these comments meant to be a solicitation of business in any way: such inquiries will not be responded to. This content is intended solely for the entertainment of the reader, and the author.